Country Awards for Excellence 2014: Africa

Angola Best bank: Banco Angolano de Investimentos

Rapid improvements in financial regulatory structures, increased levels of international investment and oil and gas production in Angola have sparked a rapid expansion of the country’s banking sector.

Meanwhile, banks remain under pressure. Profits have become strained and increases in non-performing loans are common, partly due to a weakening real estate market.

Banco Angolano de Investimentos (BAI), however, has weathered the storm well and deserves the accolade of best bank in Angola for the third year in a row.  BAI, with Mário Alberto dos Santos Barber as chief executive since 2010, increased loan loss provisions to reflect increased credit risks, which led to a decrease in net profit this year to $124 million from $180 million in 2012, but in doing so, the bank has managed to lower its NPL ratio to 6.9% from 7.3%.

In January 2014, Moody’s awarded BAI a rating of Ba3, the same as the sovereign. It was the first organization in the country, aside from the sovereign, to receive a rating, highlighting the bank’s dedication to transparency and due diligence. Three months later Fitch rated the bank B+.

Ghana Best bank: Barclays Bank Ghana

Ecobank Ghana has been knocked off the best bank position by Barclays Bank Ghana. Ecobank is still the largest bank in the country in terms of assets, but Barclays has grown strongly in a challenging economic environment as the country struggles with swelling inflation, a weakening currency and a twin deficit.

Under the leadership of managing director Patience Akyianu, total assets for Barclays grew by 18.6% to C2.3 billion ($740 million) for 2013 and the bank made a profit before tax of C202.5 million, 34.2% above the C150.8 million it recorded in 2012. At the same time, the bank’s highly capitalised position was illustrated by a capital adequacy ratio above 20% throughout the year, exceeding the industry average.

In the face of intense competition, Barclays engaged in a series of aggressive policies to increase its loan book and gain market share. In 2013, Barclays reduced its loan processing time from 72 to 24 hours. As a result, the bank’s balance sheet grew by 18.6% by the end of 2013 to reach C2.3 billion and loans and advances grew by 25% to C994 million within the same time period.

Kenya Best bank: Kenya Commercial Bank

The long-running battle between Equity Bank and Kenya Commercial Bank (KCB) for the title of Kenya’s best bank was as close as ever this year, but KCB, under Joshua Oigara, chief executive since January 2013, has reclaimed the title from Equity Bank.

KCB’s total assets rose to KSh323 billion ($3.6 billion) up from KSh305 billion in 2012 while Equity Bank’s total assets increased to KSh278 billion from KSh243 billion in 2012. In the year ending 2013, KCB Group reported profit before tax of KSh20.1 billion – a 17% increase from KSh17.2 billion in 2012. Before tax profits for Equity Bank Group on the other hand, reached KSh19 billion in the same period. KCB is the country’s most profitable financial institution.

KCB’s already solid retail banking position also made excellent strides over the last year following a strategic partnership with Safaricom in October 2013. Through the partnership, Safaricom’s subscribers can open bank accounts with KCB via a new mobile phone platform called M-Benki. The account facilitates deposits, withdrawals, payment for goods and services as well as transfer of funds within and to rival banks in the country.

Within the first three months of its operation, M-Benki opened 150,000 accounts bringing total customers registered in KCB mobile banking to 1.1 million.

Mauritius Best bank: Mauritius Commercial Bank

Mauritius is diversifying away from traditional businesses in textiles, sugar and tourism. Services, in particular the banking sector, are becoming much more important.

Mauritius Commercial Bank (MCB), under group chief executive Pierre Guy Noël, has successfully leveraged off this trend. It is the largest bank in Mauritius, with a market capitalization of $1.6 billion accounting for 24% of the market. Total assets for the bank rose from MauRs191 billion ($6.3 billion) in 2012 to MauRs217 billion.

By comparison, the market capitalization of MCB’s closest rival, State Bank of Mauritius (SBM) reached $1 billion, accounting for a 20% share. SBM’s total assets are less than half of MCB’s, at MauRs111 billion.

Last year, MCB lost out to SBM for the title of best bank in the country, as its international expansion plans overshadowed its domestic ambitions. Since then, MCB has rallied, and its home market has become just as important as its international ambitions.

MCB is present in eight countries with dedicated subsidiaries in Madagascar, Seychelles, Mozambique and the Maldives. Foreign earnings accounted for 46% of the bank’s overall profits in 2013.

Morocco Best bank: Attijariwafa Bank

Under chief executive Ismail Douiri’s leadership, Attijariwafa Bank continues to outdo its rivals in Morocco, maintaining its status as the biggest and most profitable bank in the country with a market capitalization of Dh62 billion ($7.5 billion), total assets at Dh386 billion and a return on equity of 15.4%. This comes despite a slowdown in North Africa’s overall economic growth from 9.5% in 2012 to 3.9% in 2013.

Attijariwafa has followed economic development south of its home country. The bank has a presence in Senegal, Guinea Bissau, Mali, Gabon and Cameroon amongst others, operating in 23 countries in total. Most recently, Attijariwafa acquired a 55% stake in Banque Internationale pour l’Afrique in Togo.

As well has having the largest coverage of any Moroccan bank domestically, Attijariwafa has an Africa-wide branch network of more than 580 and boasts one of the largest networks of any bank outside of South Africa.

Mozambique Best bank: Millennium bim

Portuguese owned Millennium bim returns this year as Euromoney’s best bank in Mozambique. Led by chief executive Manuel Marecos Duarte, the bank is the country’s largest in terms of assets, with $2.92 billion, up from $2.45 billion in 2012.

Millennium bim also has the widest reach of any bank in Mozambique, with 415 ATMs and 5,004 points of sale. In 2013, it added six branches to its network, bringing the total number of branches throughout the country to 157.

The bank also has 39 rural branches, the greatest number of any bank in Mozambique. Millennium bim understands the difficulties that rural populations face when accessing banking services and aims to solve these with Millenium IZI, a mobile banking solution which allows all of the transactions available at an ATM, besides cash withdrawals, from a mobile handset.

In 2013, Millennium bim’s client base rose to about 1.2 million customers, the largest in the country and more than twice that of nearest competitor Banco Comercial e de Investimentos, which has just over 620,000 customers on its books.

Nigeria Best bank: Guaranty Trust Bank Best investment bank: Stanbic IBTC

Access Bank is becoming a real contender among the top tier banks. While small before the crisis, now it is among the top-tier players, and analysts argue that if it were to continue along the same trajectory, it would soon demonstrate similar strength to Guaranty Trust Bank (GTBank). That said, GTBank remains the example to follow in Nigeria and returns this year as Nigeria’s best bank.

With chief executive Segun Agbaje at the helm, the bank reported the best financial ratios for any local deposit bank in Nigeria in 2013 with return on equity at 29% and return on assets at 4.7%, at a time when the banking sector is still digesting the banking crisis: the sector recorded ROE and ROA averages of around 21% and 2.5% respectively. The bank maintained its position as the most profitable bank in Nigeria for the third year in a row.

In December 2013, GTBank boasted total assets under management of N2.1 trillion ($12.9 billion), an increase from N1.7 trillion and 21% up on a year earlier. Market capitalization for the bank increased 17% to N795 billion.

Meanwhile, analysts argue that last year’s winner, First Bank of Nigeria (FBN), could be headed for trouble as credit losses have increased over the last year, which may have an effect on the bank’s capitalization.

GTBank is Nigeria’s most innovative bank. Its most recent development, GTBank Social Banking, which launched last April, allows customers to open accounts and complete transactions through Facebook. The new product aims to cater for the bank’s growing social media presence of 1.8 million followers on Facebook, 209,000 on Google+ and 120,000 on twitter.

GTBank also created a new mobile banking app to support all its internet banking and mobile money service offerings, including foreign exchange transfers to any account in the world and local money transfers to any registered mobile phone user in Nigeria, even if the beneficiary does not have a banking relationship with any bank in the country.

In investment banking, Stanbic IBTC continues to innovate, create new solutions for clients and lead in Nigeria, especially as the banking landscape becomes increasingly sophisticated. The bank provides services to a wide range of clients in Nigeria including the government, large corporates, and international parties.

Stanbic IBTC acted as joint issuing house in the first sukuk out of West Africa from Osun State in October last year. The debut issue found strong demand among institutional investors and the sukuk was increased from N10 billion ($62 million) to N11.4 billion.

In private equity, Stanbic IBTC facilitated the acquisition of West African based dairy company Fan Milk International by Danone and private equity firm, Abraaj Group last October – one of the highest profile transactions in African private equity in recent years.

Stanbic IBTC also acted as senior lead arranger for Dangote Industries Limited on the $3.3 billion medium term facility, the largest commercial bank loan syndication arranged for an indigenous company.

Rwanda Best bank: Bank of Kigali

Rwanda’s banking sector remains small compared to most of its East African peers, but Bank of Kigali continues to set the example of what a well-run bank in Rwanda can become.

While regional banks including KCB and Equity Bank are gaining traction in Rwanda, Bank of Kigali remains defiant in the face of increased competition and remains the country’s largest financial institution. In 2013, its total assets reached $630 million, up 30% on the year before and accounted for 36% of market share. Bank of Kigali’s nearest competitor, Bank Populaire du Rwanda, accounted for only 14% of the market in the same time period.

The bank also remains the market leader in terms on loans and deposits, accounting for 30.4% and 32.5% of the market respectively. Under the leadership of James Gatera, chief executive since 2007, Bank of Kigali has grown at a compounded annual growth rate of more than 20% in the last five years in metrics including total assets, loans and advances, and customer deposits.

In July 2013, the bank was also chosen as the global pilot partner bank by Visa for the launch of its mVisa wallet, a branchless banking platform that provides access to formal financial services through mobile phones.

The bank now offers mVisa as a bulk payment solution to the World Food Programme to pay refugees their monthly stipend, to the Ministry of Agriculture to pay farmers subsidies for purchase of fertilizers, and to the Rwanda Social Security Board to pay pensioners monthly allowances.

South Africa Best bank: FirstRand Best investment bank: Rand Merchant Bank

FirstRand, led by chief executive Sizwe Errol Nxasana, has successfully manoeuvred its way through the country’s tricky economic and banking landscape. Now it has emerged as one of the strongest players in South Africa, and has outperformed its peers in the last few years.

After the global financial crisis, FirstRand, unlike some of its peers, wound down its mortgage lending, keeping NPLs relatively low, which reduced the cost of the crisis on the bank. In 2013, NPLs decreased by 9%, even though total coverage increased from 60% to 74.3% year-on-year due to the shift in the NPL mix from secured to personal loans and higher portfolio impairments.

The group’s return on equity averaged 18.5% over the past five years compared with the sector-wide average of just under 15%. In 2013, ROE reached 22% and group earnings for 2013 reached R15.3 billion ($1.45 billion) making the bank one of the most profitable in South Africa.

While the bank is largely South Africa-based, FirstRand is transforming itself into an important regional player – especially pertinent at a time when South African vulnerabilities are building. FirstRand opened its first private banking branch in Nigeria in February 2013, which has acted as a springboard for business in West Africa.

It also has subsidiaries in Namibia, Botswana, Zambia, Mozambique, Tanzania, Swaziland and Lesotho. Internationally, it has branches in India, the UK, and representative offices in Dubai, Kenya, Angola and China.

In keeping with the group’s success, FirstRand’s investment banking brand, Rand Merchant Bank (RMB), returns as this year’s best investment bank in South Africa.

Within the period under review, RMB acted as mandated lead arranger for the largest African bond issuance in three years – the $2 billion Treasury bond in September 2013, which generated one of the largest order books of 2013 at $7.4 billion. The bond has 12-year tenor, which broke the 10-year ceiling since the recession, and a yield of 5.875%, 315 basis points above the 10-year US Treasury’s benchmark bond.

RMB also managed to close some large M&A deals in South Africa despite a period of uncertainty for investors.

RMB was transaction adviser for South African company RCL Foods’ acquisition of the entire issued share capital of TSB Sugar in December 2013 worth R4 billion. At the same time, RMB advised Times Media Group on the sale of its interests in Exclusive Books, South Africa’s largest book retail chain by turnover, to boutique investment firm Global Capital.

In the loans and leveraged finance markets, RMB worked on some innovative deals: The bank acted as MLA in respect of the corporate advisory, debt arranging, structuring and placement for one of the largest single real estate debt funding packages concluded in the South African market worth R5.07 billion for Old Mutual Life Assurance Company.

The bank also acted as sole arranger for Vodacom’s R2 billion securitization of a component of its debtor’s book whose credit risk Vodacom needed excluded from its balance sheet.

Tanzania Best bank: National Microfinance Bank

For the second year in a row, Tanzania’s second largest bank, the National Microfinance Bank (NMB) deserves recognition as the best bank in country due to its robust growth and wide network distribution.

NMB has outpaced the market on the most important metrics. Under chief executive Mark Wiessing’s leadership, top line revenues have grown 18% at NMB, while revenues for the market as a whole grew at 15%. Customer deposits grew 13% at the bank compared to the market, which grew at 8%.

The bank has over 150 branches and 65% of NMB’s branches are in rural areas, more branches than any other bank in the country. From having no ATMs in 2005, NMB now has 500, again the most ATMs of any financial institution in Tanzania. The bank is also the largest debit card issuer in the country, with over 1.6 million cards in circulation.

Due to the bank’s extended coverage, NMB has increased market share in customer deposits from 18.6% to 19.4%, loans from 17.4% to 18.2% and operating income from 24.8% to 26.2% between 2012 and 2013.

Zambia Best bank: Standard Chartered

Standard Chartered is not only the oldest financial institution in Zambia, but the best. Standard Chartered’s success in Zambia over the last couple of years is due in part to chief executive Andrew Okai’s focus on financing Zambia’s corporates in the burgeoning mining and agricultural sectors. Combined, these sectors account for just under 25% of GDP.

In wholesale banking, revenue grew by 12% to ZK360 million ($69 million) in 2013 and customer deposits grew by 18% year-on-year. Standard Chartered’s loan book grew by 10% between 2012 and 2013, highlighting its position as the go-to bank for corporate financing.

Like last year, Standard Chartered remains dedicated to SME banking and enhancing access to trade and working capital solutions for SME clients. This year, the bank introduced a business debit card for SME clients and strengthened the bank’s SME customer value proposition with dedicated SME relationship managers, including Chinese speaking managers.

Standard Chartered has also been able to leverage the bank’s ties in Asia, facilitating trade between Asia and Africa, and China and Zambia in particular. Last year, Standard Chartered introduced on-shore renminbi (RMB) trading accounts, which has strengthened the relationship between the two countries.